With oil prices down -20% so far this year, the panic that is engulfing markets globally is wreaking havoc on oil markets as well. In the words of our macroeconomists: "China's ongoing growth slump and foreign exchange wobbles have created some panic but [as yet] no crisis ... A renewed round of market stress has returned our Global Risk Appetite Index to panic, darkening our growth outlook

The price of oil has plunged by 75% since the summer of 2014, thanks to a massive supply glut in the market, largely because of OPEC's refusal to lower production rates. Prices briefly fell to less than $27 a barrel last week, but they have since risen back above $30. Brent, the European benchmark, was at $31.50 at lunchtime in Europe, while West Texas Intermediate was at $30.50.

Despite cutting forecasts, Credit Suisse isn't totally downbeat on oil, and its analysts predict that even in the most bearish scenario — which includes a global downturn and increased supply by OPEC — oil will recover to at least $60 a barrel by 2018, allowing the US shale-oil industry to expand. Here's the chart:

Credit Suisse

CS also expects the fundamentals of the oil market to "rebalance" by the middle of 2016, including an end to the supply glut that has plagued oil for the past few years. Here's Credit Suisse again (emphasis ours):

We project that the current supply surplus shifts into a deficit as production from non-Opec tracks more steeply down, while demand continues to grow. But we have become more worried about the outlook for oil demand. Even though global oil demand growth of -1.7% last year hinged first and foremost on the ongoing recovery in developed economies, if the current panic persists, the DM recovery too may be affected: